Under normal circumstances, the record $5bn (£4bn) fine looming over Facebook in the US would have been seen as a severe punishment, enough to send shivers down the spines of any firm handling sensitive data. But these are not normal circumstances; instead of Facebook getting its just deserts, the penalty has now been branded “a slap on the wrist”.
The Federal Trade Commission punishment – flagged up by Facebook in its recent results announcement, which said the social media giant had already set aside the cash – is designed to settle an investigation into the company’s privacy violations, launched following the Cambridge Analytica scandal.
Reports from the States, citing anonymous “sources familiar with the matter”, claimed that the settlement has been approved by a 3-2 vote that broke along party lines, with Republicans in favour and Democrats opposed. The justice department is expected make a final approval of the fine.
The $5bn fine would be the FTC’s largest ever penalty slapped on a tech company, and the largest ever against any company for a privacy violation. As part of the FTC’s “deal” with Facebook, the company will now “reexamine” how it handles user data, but it will not restrict the its ability to share data with third parties, reports said.
Critics have been quick to point out that even $5bn will hardly affect Facebook’s profits. The company had more than $15bn (£12bn) in revenue in the first three months of 2019.
In fact, the company’s share price actually rose in the wake of the announcement; Facebook’s market capitalisation went up $6bn, boosting founder Mark Zuckerberg’s personal wealth.
This has not been lost on some. Open Markets Institute fellow Matt Stoller, who specialises in monopoly power told The Guardian: “This isn’t a fine, it’s a favour to Facebook, a parking ticket which will clear them to conduct more illegal and invasive surveillance.
“Congress should start defunding the FTC and move the money to state enforcers like [Washington DC attorney general] Karl Racine, who believe in enforcing the law,” he added. Racine is currently pursuing a lawsuit against Facebook over the Cambridge Analytica case.
Meanwhile Democrat David Cicilline, who chairs the House sub-committee on antitrust issues, tweeted: “The FTC just gave Facebook a Christmas present five months early. It’s very disappointing that such an enormously powerful company that engaged in such serious misconduct is getting a slap on the wrist.”
Fellow Democrat, Senator Ron Wyden of Oregon added: “This reported fine is a mosquito bite to a corporation the size of Facebook. And I fear it will let Facebook off the hook for more recent abuses of data that may not have been factored in to this inadequate settlement.”
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